US inflation edges higher but some relief seen
STORY: U.S consumer prices continue to climb.
A report from the Labor Department Wednesday showed higher gasoline costs and rents pushed up prices in April, while underlying inflation remained strong as used car prices rebounded.
The Consumer Price Index or CPI rose four-tenths of one percent last month, matching expectations.
However, prices in the 12 months through April increased 4.9 percent which was slightly below forecasts and the first time they have risen less than five percent in two years.
That is still more than double the Federal Reserve’s two-percent inflation target, which together with labor market resilience make it unlikely the Fed will start cutting interest rates this year as currently expected by financial markets.
The Fed has hiked rates by five percentage points since March 2022 to try to bring down inflation which peaked at more than nine percent last June which was the biggest increase since November 1981.
It is subsiding as last year's initial surge in energy prices following Russia's invasion of Ukraine drops out of the calculation.
Stocks were mixed in late morning trading.
